Wild Card

Microsoft reported earning last night and guided lower on forecasts. The stock was heavy for about 11% today and dragged down tech indices like the Nasdaq 100. I don't have a whole lot to say specifically about Microsoft since I don't follow them too closely. However, I do find it interesting that, once again, a widely-held leader disappoints but doesn't wreak havoc on equities in general. A decade ago, if IBM or General Motors dropped a bombshell, the entire market would suffer because of newly perceived risks to the economy. In pre-bubble days, though, the markets were dominated by investors, not speculators. Today the name of the game is hit and run, so if Microsoft gets hit, it simply time to run with something else.

Today's biggest winners, apart from commodity-based equities, were financials. Citigroup was on the receiving end of an upgrade and saw its shares pop for nearly 4%. As a group, financials gained about a percent. We'll probably see a few more upgrades and a lot more speculation in this sector as people weigh in on a possible halt to rate hikes.

In the commodities arena, silver was the big winner today, gaining about 9%. It is quite appropriate to see silver have a banner day on the first day of trading for Barclay's Silver ETF. How much the ETF had to do with today's gain, I don't know. What this wild metal will do in coming weeks is also unclear to me, which is why I am sticking to my base position for now, but I intend to buy more silver and perhaps some call options on the miners in the near future.

On the economic front, first quarter GDP came in strong. Normally, strength in GDP would incite fear over more rate hikes, but Bernanke provided speculators with a wild card yesterday when he said, "Even if in the committee's judgment the risks to its objectives are not entirely balanced..." Therefore, no matter what you hear suggesting inflation or economic over-heating, sleep easy. The money presses will keep churning.